How NFL Contracts Are Structured And Really Work.

Intro nfl contracts are an enigma the vocabulary used when talking about nfl contracts is alien to many fans and that leads to miscommunications when it comes to nfl contracts misunderstandings on how much a player gets how teams stand to the cap and the specifics of contracts are common across the whole nfl fandom in this video i'll give the primer on everything fans should know about nfl contracts in order to first understand nfl contracts a basic understanding of the terms and systems that go into nfl contracts as needed with just an understanding of these Contract Sections basic parts a fan can already start determining the quality of deals players sign so the base salary is the foundation for contracts for every nfl player players earn their base salary by just being on the team's roster during the year players are given their base salary paying 18 installments for the 17 game schedule one per week during the season base salary can be non-guaranteed or guaranteed depending on various clauses and conditions and is the bulk of the money that players lose when they get cut as any current year or future year based salaries are lost when a player is cut unless they are guaranteed one thing that is somewhat unknown is that not all guaranteed money is the same there are three types of guaranteed money that teams can use when constructing a contract Guaranteed Money the best known form of guaranteed money is guaranteed for injury injury guarantees come into effect if a player is released but is unable to partake in football activities or pass a physical if a player is released and the condition is met the player is entitled to money that is protected against injury if a player is guaranteed money for injury and they're healthy then the money guaranteed for injury is lost when the player is cut outside of guaranteed for injury there are two other types of guarantees these two types are skill guarantees and cap guarantees now a skill guarantee will protect the player from being released due to the player not having the requisite skill needed according to the team a cap guarantee will protect the player from being released so the team can get under the cap sign a free agent or re-sign another player these two guarantees are rarely ever exercised on their own the combination of cap and skill guarantees with injury guarantees forms a full guarantee full guarantees are used in almost every nfl contract and the players entitled the money from full guarantees when they signed the contract Signing Bonus a signing bonus is an upfront guaranteed payment the player receives when they sign their contract unlike normal guaranteed money a player gets the signing bonus money usually within the first year after signing the contract and the signing bonus money is fully guaranteed now while the player gets the lump sum up front the team can spread the signing bonus on their cap space into smaller payments over the length of the contract up to a maximum of 5 years the spread out payment of the signing bonus is called the pro-rated bonus when a player is cut the team must pay the remainder of the spread out signing bonus at once and this payment is applied to the team's cab space now a roster bonus is Roster Bonus money for being on a roster at a certain date or being on an active roster during the year in these roster bonuses teams will usually specify a date the player will earn the bonus with a clause that reads something like player will receive two million dollar roster bonus on the second day of the 2022 league year these types of bonuses are to force the hand of the team to make a decision on keeping the player or releasing them another type of roster bonus is conditional payment for if the player is on the active roster or the 53-man roster during the season this type of roster bonus is known as a per game roster bonus and the player is paid 1 17 of that bonus each time they're active a recent high profile example of per game roster bonuses was when richard sherman negotiated per game roster bonuses for every year of his deal that in total would have paid him 5 million over his 3 year contract if he had played all 48 games workout bonuses are compensation for attending an agreed-upon percentage of off-season workouts if the player Work Out Bonus fulfills this they get the flat amount agreed upon in the contract the new cba gives players with four more accrued seasons five guaranteed absences without losing their offseason workout bonus nfl contracts can have incentives that give the player money if the player hits certain thresholds set in the contract there are two types of incentives the incentives are classified likely to be earned and not likely to be earned based on what the player did in the previous season in relation to the incentive if a player would have earned the incentive in the previous year the incentive is considered likely to be earned and the opposite is true for not likely to be earned likely to be earned incentives count against the current year's cap space for the team will not likely to be earned incentives are charged against the following year's cap space some examples of these incentives would be making the pro bowl having a certain amount of receptions yards touchdowns Option Bonus tackles sacks or simply based on playing time there are other types of basic principles and nfl contracts mainly manifesting and other types of guaranteed money to further ensure a player's financial security teams can offer other guarantees than the signing bonus the primary way this occurs is a team will guarantee a player's base salary partially or fully in certain years the way this provides security for the player is that the guaranteed salary might make the player uncuttable in those years meaning they'll be assured they see the full money from that year another type of guarantee is an option bonus which is like a signing bonus but is triggered at a later date option bonuses aren't always guaranteed but the main way option bonuses are used is to give the player guaranteed money later in their deal these option bonuses can be spread out over five years at the start of the option much like signing bonuses the occurrence of dead cap is when a team cuts a player and the team then pays out all guaranteed money owed to the player this money is then charged against the current year's salary cap space for the team in question effectively spending it in the case of a pro-rated signing bonus the spread out cap hits are all added up and charged all in the current year's cap hit dead cap hits are the best way for players to protect themselves from being cut as a high enough dead cap hit will be a deterrent for teams to move on from the player in many cases Contract Example and BreakDown this contract is what the kansas city chiefs gave sammy watkins and free agency in 2018. it's a good example of a pretty simple nfl contract there are a few things going on here with the base salary the chiefs structured watson's contract like a lot of teams who have limited cap space where the team gives the player the minimum allowed base salary in the first year of the contract to lower the cap hit in the first year due to watkins four crewed seasons in the nfl the lowest they could give them was a 790 000 base salary the chiefs also fully guaranteed part of watson's 2019 salary now watkins was given a 21 million dollar signing bonus that when pro rated over three years turned into a seven million prorated signing bonus each year remember the money is still fully guaranteed at signing watkins didn't have any roster bonuses as part of his contract roster bonuses aren't always used in nfl contracts watkins was given a few workout bonuses on his deal a player has to participate in a certain amount of offseason workouts in order to see this money now for the cap hit we see that because the chiefs paid the minimum base salary allowed in year one of watkins deal watkins year one cap hit is only 7.8 million which seems pretty impossible when you hear about his contract up front however the large cap hits in year two and year three reflect the small first year hit now when we look at the dead money and cap savings watkins contract is a good introduction into how nfl contracts work the contract shows that the chiefs wanted a lower first year cap hit on the contract the team could afford to push a big guaranteed cap hit to year two and watkins likely wanted assurances he would be a chief in year two with a guaranteed salary after the 2019 season however there was no more base salary guarantees and the pro rated bonus left on his contract was only 7 million so the chiefs could have cut watkins in year 3 of the deal this was a large factor in the chiefs and watkins ultimately agreeing on a restructured deal that off-season this push and pull-up guarantees dead money and cap savings is carefully constructed by teams and players so the team can feel flexible and the player can feel secure NFL GM's teams use a combination of all contract tools at their disposal in order to get a player to agree on a contract a general manager could offer a player a large signing bonus so they get a lot of money up front or a general manager could offer guaranteed-based salaries later in the deal to provide the player long-term security general managers have to navigate this give and take along with other decisions about cutting players in order to balance the books and give the team the best roster it can have the basics of an nfl contract lay the foundation for how general managers across the nfl shape their team and cap space a feat that is ever changing that's pretty much everything i've learned about nfl contracts personally i find looking at a video of a monkey eating an apple a much simpler thing to digest i hope you liked the video if you want to leave a like go ahead if you want to subscribe i'd appreciate it and stay tuned for the next one thanks a lot 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